XenoTherapeutics to acquire Essa Pharma

ESSA Pharma (EPIX) announced that it has entered into a definitive agreement with XenoTherapeutics under which Xeno will acquire all of the issued and outstanding common shares of ESSA. XOMA Royalty (XOMA), the biotechnology royalty aggregator, is acting as the structuring agent and will provide financing to Xeno for this Transaction. Under the terms of the Business Combination Agreement, ESSA shareholders will receive a cash payment per Common Share that will be determined based upon ESSA’s cash balance at closing after deducting certain transaction costs, a reserve for liabilities and legal expenses, and a transaction fee. In addition, each ESSA shareholder will also receive one non-transferable contingent value right for each Common Share that entitles the holder to receive a pro rata portion of up to $2,950,000 within 18 months following the close of the Transaction. To expedite the distribution of cash to ESSA shareholders, ESSA will also apply to the Supreme Court of British Columbia for an order authorizing it to make an initial cash distribution to ESSA shareholders prior to the closing of the Transaction. In total, with the initial cash distribution, if authorized, and the cash payable upon closing of the Transaction, each ESSA shareholder is currently estimated to receive approximately $1.91 per Common Share, exclusive of any payments received pursuant to the CVR.